Advertising Supplement ESGinve sting PS001_PI_20210419.pdf RunDate: 04/19/21 ESG supp 8 x 10.875 Color: 4/C At Calvert, Responsible Investing is all we do We have a track record of influencing positive change while delivering competitive investment results. We are proud to sponsor this year’s Pensions & Investments ESG Investing Virtual Series. Visit www.calvert.com to learn more. ©2021 Calvert Research and Management | Suite 400, 1825 Connecticut Avenue NW, Washington, DC 20009-5727 | 800-368-2745 | www.calvert.com NOT FDIC INSURED | OFFER NO BANK GUARANTEE | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT A DEPOSIT PS002_PI_20210419.pdf RunDate: 04/19/21 ESG supp 8 x 10.875 Color: 4/C Advertising Supplement Sponsors CALVERT Eaton Vance Management Two International Place, Boston, MA 02110 Susan Brengle Managing Director, Institutional 617.672.8540 Contents [email protected] April 2021 www.eatonvance.com CLEARBRIDGE INVESTMENTS 620 Eighth Avenue, New York, NY 10018 STATE OF ESG 4 Vinay Nadkarni The pandemic has sharpened Managing Director, Head of Global Business Development plan sponsors’ focus on ESG investing, 212.805.2235 while ongoing regulatory initiatives [email protected] and demand for positive impact have www.clearbridge.com also encouraged activity DWS 875 Third Avenue, New York, NY 10022 EXPANDING PLAN PRIORITIES 6 Laura Gaylord Key themes include climate, Head of Relationship Management, Core Institutional social issues and governance, 714.814.0100 seen through the dual ESG lens of [email protected] risk management and better outcomes www.dws.com Compliance code: I-082236-1 INVESTORS SHARPEN THEIR FOCUS 8 MANULIFE INVESTMENT MANAGEMENT ESG strategies get more granular within 197 Clarendon Street, Boston, MA 02116-5010 sectors and across asset classes Todd Cassler, Head of Institutional Distribution, U.S. and Europee 617.663.2714 [email protected] THE DATA EVOLUTION 10 www.manulifeim.com/institutional Data and metrics continue to improve, global standards move forward, and NATIXIS INVESTMENT MANAGERS asset managers sharpen their toolkits 888 Boylston Street, Boston, MA 02199 Jim Roach SVP of Retirement Strategies 617.449.2647 [email protected] www.im.natixis.com Compliance code: 3498558.1.1 This special advertising supplement was STATE STREET GLOBAL ADVISORS not created, written or produced by the 1 Iron Street, Boston, MA 02210 editors o Pensions & Investments and Suzanne Smetana does not represent the views or opinions Head of ESG Investment Integration o the publication or its parent company, 617.662.9919 Crain Communications Inc. [email protected] www.ssga.com ESG Investing 3 PS003_PI_20210419.pdf RunDate: 04/19/21 ESG supp 8 x 10.875 Color: 4/C Advertising Supplement 4 ESG Investing PS004_PI_20210419.pdf RunDate: 04/19/21 ESG supp 8 x 10.875 Color: 4/C Advertising Supplement The pandemic has sharpened plan sponsors’ focus on ESG investing, while ongoing regulatory initiatives and demand for positive impact have also encouraged activity he COVID-19 pandemic has brought TAIL RISKS OCCUR of ESG thematic research at DWS. Besides a new to the front of everyone’s mind the “COVID-19 was a huge tail-risk event. It has shown understanding of previously ignored risks, like fact that [environmental, social investors that these tail risks can happen, and the impact of infectious disease on the economy, “T and governance] risks are very real they have financially material consequences, as there’s been an appreciation of ESG funds that and can have a substantial impact on business. It well as moral consequences in income [disparity],” outperformed last year, he noted. “But we need to has definitely sharpened asset owners, investors said Peter Mennie, global head of ESG integration be careful when breaking down that performance and business managers’ focus on the need to and research at Manulife Investment Manage- attribution. Typically, ESG indices were positioned understand social and environmental risk and ment. “Also, COVID-19 is a zoonotic disease. It to be underweight energy and overweight health- understand their businesses’ planning ability to passed from animals to humans, and that under- care and technology. And within that, there was manage through these evolving situations,” said lines the importance of nature as a sustainability outperformance of the better-rated ESG names,” John Streur, president and chief executive officer risk,” he said, pointing to the U.K. Government’s Lewis said. The asset write-downs by the oil and at Calvert Research and Management. recently published “Dasgupta Review” on The gas companies last year [have] led to consider- “The pandemic showed the importance of Economics of Biodiversity. ations of a potential repricing of long-term crude the ‘S’ in ESG. We really started to understand the The Review “drew direct connections between oil, he added. “Then there is corporate reputation importance of our workforce across all differ- how rising temperatures and poor standards of and the issues around racism, social injustice and ent industries. We realized that the healthcare sanitation could have contributed to the spread inequality. COVID has shone an incredibly strong systems being put in place by corporations and of diseases like COVID-19, turning the spotlight light on workers, women particularly, in frontline governments were critical to handle disruptions on sustainability issues. In our view that really sectors, like healthcare, retail and education, who to our economy and to the need to ask so much of increased the demand for sustainable investing,” have been most impacted by the pandemic.” our workforce when things changed abruptly, par- added Mennie’s colleague, Eric Nietsch, head of ESG “The COVID-19 pandemic underscored the ticularly in industries that were most disrupted,” Asia at Manulife Investment Management. importance of ESG issues and has highlighted four said Ed Farrington, executive vice president, “The pandemic has bought to the fore a range aspects of ESG adoption,” said Suzanne Smetana, institutional and retirement, at Natixis Investment of different issues: risk, return, write-downs, head of ESG investment integration at State Managers. reputation and recovery,” said Michael Lewis, head continued on page 12 Investor perception on ESG is changing Perception on ESG and performance (retail and institutional investor surveys) Survey question: What do you think: Does ESG integration lead to higher/lower/equal performance 100% e 80% ESG is viewed as having a positive impact on return 60% 40% 20% 0% -20% -40% vey respondents with a positive or -60% % of sur -80% ESG is viewed as having a negative impact on return negative view on ESG and financial performanc -100% ) t & & ells & (2019) Feri Euro Riedl Wins Eccles FA ZEW (2007) Maastrich Gallup/Wrgo (2017) DV Bafin (2019) MIRA (2020) Rating (2009) Smeets (2015)Zwergel (2016)Fa RBC GAM (2017)RBC GAM (2018)RBC GAM (2019) RBC GAM (2020) BankInvest (2009University Erste(2011) Bank (2011) Kastrapeli (2017) Source: DWS analysis 2020; ZEW (2007): German institutional investors; Feri Euro Rating (2009): German institutional investors; Bankinvest (2009): institutional investors from Germany, Austria, Switzerland; Maastricht University (2011): German retail clients; Erste Bank (2011): Austrian retail clients; Riedl & Smeets (2015): Mutual fund investor in the Netherlands; Wins and Zwergel (2016): German retail investors; Gallup/Wells Fargo (2017): U.S. private investors; Eccles & Kastrapeli (2017): global institutional investors; RBC Global AM (2017/2018/2019/2020): global institutional investors, RI / UBS (2019): global institutional investors, DVFA (2019): German institutional investors, Bafin (2019): German private investors, Macquarie Infrastructure Real Assets (2020): real asset investors. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect. ESG Investing 5 PS005_PI_20210419.pdf RunDate: 04/19/21 ESG supp 8 x 10.875 Color: 4/C Advertising Supplement Expanding Plan Priorities nstitutional investors around the globe are than from any other country,” said Michael Lewis, “As an example, take the disruption we saw thinking about their governance approach and head of ESG thematic research at DWS. in Texas in February due to a severe weather risk management framework toward climate The focus on “climate risk has evolved from event that was supposed to be a 100-year event, Irisk. “The No. 1 concern for investors from an purely risk management, avoiding companies but it happens every five years. Investors are ESG perspective is climate risk. It’s front and cen- that have big exposure to climate risk. [There] is beginning to realize that was a climate issue and ter with the regulatory requirements in countries now a need to understand a company’s strategy a governance issue,” said Edward Farrington, around the world. The U.S. has been slightly tainted to get to net-zero emissions and to find revenue executive vice president, institutional and retire- by a perception of the federal level not being very streams associated with a zero-carbon economy, ment, at Natixis Investment Managers. “Many of ESG-minded, which is inaccurate. In the [United alternative energy and energy efficiency,” said those power companies that failed [in Texas] were Nation’s Principles for Responsible Investment], for John Streur, president and chief executive officer told that they needed to upgrade their systems, example, there